Notes on Constructing the Audit These notes

Transcript:Notes on Constructing the Audit These notes:
Notes on Constructing the Audit These notes describe details about the audit in the paper “Measuring Geopolitical Risk” by Dario Caldara and Matteo Iacoviello Construction of the Index Each month the universe of newspapers that we use to construct our GPR index contains about ten of thousands of articles articles. This is set U. Of these, only about 3 percent (see Table A.2) meet our computer-generated criterion to be included in the GPR index. This is set G. Each month, The ratio G/U (appropriately normalized) is our baseline GPR index. Design of the audit sample – Benchmark GPR Index SAMPLING FROM GPR ARTICLES (set G) We sample a subset of the articles that are identified as discussing high or rising geopolitical risks. We code these articles as GPR=1, GPR=0, GPR=-1, as follows: 1 = the article contains references to high or rising geopolitical risks. 0 = the article contains no references to geopolitical risks, or is uninformative whether geopolitical risks are rising or falling. -1 = the article contains references to low or declining geopolitical risks. Design of the audit sample – Expanded Sample Sampling from GPRE ARTICLES (set E) We sample from the universe of newspapers a subset of articles which is sufficiently large to include articles that are likely to be GPR=1 articles. This is set E, and contains about [ 15% ] of the articles in sample U. The ratio E/U is the GPRE index. The subset is constructed sampling articles that contain any of these 4 words (roots): military OR war OR geopolitical OR terroris*. We code these articles as GPR=1 or GPR=0, as follows: 1 = the article contains references to adverse geopolitical events. 0 = the article contains no references to adverse geopolitical events. How to Code Articles General Principle If the article discusses or highlights recent past, or current or future expected geopolitical risks, terror risks, war risks, terror acts, or current wars, label it as 1. Example: https://search.proquest.com/docview/1748535069?accountid=39704 A nightmare scenario in the Mideast, The Washington Post, Dec 14, 2015: “.. The wars in Syria and Iraq and jihadist attacks in the West have obscured yet another Middle East threat: the possibility that slowly escalating violence between Palestinians and Israelis will destroy one of the few remaining zones of relative tranquility between Morocco and Iran”. This article is coded as 1. How to Code Articles General Principle (Continued) If the article discusses